CSC and HP Rapidly Grow Services Deals Share.
ComputerWire tracks all publicly disclosed consulting, integration, outsourcing and managed services deals with a value greater than $1m. In the six months to June 30, 2003, we tracked a total of 791 deals with a total contract value of $44.4bn. This represented a massive increase over the $16.8bn worth of contracts tracked in the first half of 2003 and a 25% rise over the $35.4bn worth of contracts in the second half.
The number of mega-deals increased during the first half of 2003, underlining that although clients remain reluctant to invest in new systems integration and consulting projects, they continue to commit to longer and broader outsourcing agreements with the hope of driving down cost and focusing on more strategic business areas.
ComputerWire tracked 11 deals with a value in excess of $1bn, and 74 deals with a value in excess of $100m in the first half of 2003. This compares to three $1bn dollar deals and thirty two $100m contracts in the first half of 2002, and seven $1bn and fifty six $100m deals in the second half of last year.
Another sign that the size of mega-deals is increasing is a significant increase in the average value of the 20 largest IT services contracts tracked during these periods. In the first half of 2003, this figure reached $1.18bn, which is 75% higher than the $675m average value in the first half of 2002, although it declined from an average of $1.26bn in the second half of 2002.
IBM Global Services' share of the contracts tracked by ComputerWire in the first half of 2003 (by value) fell to 14.6% from 41% in the first half of 2002 where it was helped by two billion dollar wins with American Express and Nextel Communications. The real winners were Computer Sciences Corp and Hewlett-Packard. CSC took the largest share of contracts in the first half of 2003 with 19.9% compared to a share of 5.6% in the year-ago period. The gain was driven by large contract awards with Motorola ($1.6bn) and the UK Royal Mail service ($2.4bn) and Ministry of Defence ($948m), although it is worth noting that CSC will subcontract a significant chunk of the value of both of the latter two deals.
Hewlett-Packard did not claim a significant share of the contracts tracked in the first half of 2002, but its drive to build up its services operation under the stewardship of Ann Livermore over the last 12 months has reaped dividends, and it took an 8.9% share in the first half of 2003. This ranked it ahead of rival outsourcers EDS Corp and Accenture Ltd. The company is now expecting to build on first half wins with Procter & Gamble, the Swedish Agency for Public Management and Telecom Italia with further awards in the second half.
More details on this story, including market share charts for all the major services vendors, are available in this week's issue of Global Computing Services, ComputerWire's weekly newsletter on the IT services market.
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|Article Type:||Industry Overview|
|Date:||Jul 11, 2003|
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